The $32 billion
The state pension fund has set an initial allocation target of 3%, although up to 5% of the retirement system’s assets can be invested in private equity, says Ed Hennessee, Tennessee’s assistant treasurer for employee benefits and investments.
The state pension fund intends to start a search for a private equity director this month, followed by a search for a private equity consultant. As a result, it could be several months before any funds are deployed, Hennessee says.
In June, Tennessee launched an investment policy allowing the retirement system to invest in domestic and international venture capital, corporate buyouts, mezzanine, distressed debt, special situations and secondary funds. It can invest in limited partnerships, private placements, co-investments, funds of funds and other commingled funds.
The move came after a three-year period in which the investor underperformed the median in the universe of public plan sponsors with more than $100 million of assets. The underperformance stemmed from the system’s high fixed-income allocation and low alternative investments allocation relative to other large public funds nationwide, according to the state pension fund’s annual report for the fiscal year that ended June 30.
In February, Michael Brakebill joined the system as CIO after leaving his position as director of domestic equities at
LA Fire and Police has $200M left to spend
The Los Angeles Fire and Police Pensions has promised about $307 million to private equity funds so far this year. It intends to commit $500 million in 2008.
The $14.5 billion city pension fund, with 4% of its assets in private equity, is well south of its 10% target allocation.
In the private equity category, the LP includes early, middle and late stage venture capital, buyouts, distressed debt and subordinated debt. The program tries to commit to each of these subsets every year. —Nancy Gordon
Rhode Island mulls upping PE allocation
The state investment commission that invests on behalf of the $8 billion
The idea of raising the private equity allocation arose in March, when the state investment commission was discussing re-upping to
Employees’ Retirement System of Rhode Island makes 10 to 12 pledges per year to private equity, ranging from $10 million to $30 million each. The state pension fund has a 10-year investment history with Nordic Capital. Commitments to the prior three funds totaled about $43 million, with net returns of 31.6%, or more than two times invested capital, according to a commission document. —Nancy Gordon
CalSTRS to invest less in latest Blackstone fund
The report did not state any specific reason for CalSTRS’ decision. The fund manages about $160 billion in assets.
Representatives at Blackstone and CalSTRS could be immediately reached for comment. —Reuters